California’s free eFile program allows all California taxpayers to instantly file their income tax return over the internet. California provides several free resources for eFile users, including ReadyReturn (which can automatically generate simple tax returns california income tax rate for you), and CalFile, a free software program offered by the Franchise Tax Board. In addition, California supports e-filing your return through a variety of third-party software packages. California taxes the military retirement income of residents.

If you’ve submitted your California state income tax return and are due a refund, there are several ways to keep tabs on the processing of your funds. The California Franchise Tax Board runs its own refund tracking service, similar to the federal “Where’s My Refund?” tool. To use the tracker, you’ll need to enter your Social Security number, ZIP code, the exact refund amount you’re expecting, and your mailing address.

Capital Gains Taxes

If you want to check the status of your California tax refund, you can visit the California Income Tax Refund page. If your state tax witholdings are greater then the amount of income tax you owe the state of California, you will receive an income tax refund check from the government to make up the difference. If you have yet to file or are filing late, here is an overview of a few popular tax credits available in California for the 2023 tax year (taxes filed in 2024). Facts & Figures serves as a one-stop state tax data resource that compares all 50 states on over 40 measures of tax rates, collections, burdens, and more. Money withdrawn from pensions and 401(k)s, 403(b)s and IRAs is combined and taxed as regular income.

Most items are subject to these rates, but there are some exceptions, as well as certain products that face higher rates. Among the products on which sales taxes are not required are most groceries, prescription medicine and utilities like gas and electricity. “California’s imposing tax rates and formidable regulatory framework for businesses are leading to a decline in investments in industrial sectors,” Reams says. When businesses, such as Tesla, leave the state, it affects job opportunities for “hardworking blue-collar professionals,” he adds. Many hard working couples who started a small business at age 25 who now wish to sell the business at age 65 will face the Biden proposed 44.6% top rate, plus state capital gains taxes.

Standard Deduction

California allows taxpayers to report gains and losses from the sale of capital assets. Unlike federal income taxes, which may involve lower rates on capital gains, the state of California taxes capital gains as ordinary income. You can claim the California earned income tax credit (CalEITC) if you work and have low income (up to $30,950). You can also qualify for the young child tax credit (YCTC) if you if you earn less than $30,931 and have a qualifying child under the age of 6. California’s maximum marginal income tax rate is the 1st highest in the United States, ranking directly below California’s %.

For alcohol and cigarettes, rates are assessed based on the quantity of the product purchased. Cigarettes, for example, face a tax rate of $13.00 per carton ($1.30 per pack). For regular gasoline, there is a 51.10 cent per gallon excise tax.

California child and dependent care tax credit

Every Californian is entitled to reduce their gross income by a preset amount, known as the standard deduction, before calculating their income tax. That isn’t quite as cataclysmic a policy shift as referring to a blanket 44.6% long-term capital gains rate would suggest. The main proposal, which lends context to the above-mentioned “separate proposal,” is to raise the long-term capital gains and qualified dividends rates to 37% for taxpayers with taxable income above $1 million. No, Social Security income is not taxed by the state of California. But you may pay federal taxes on a portion of your Social Security benefits, depending on your income.